THE BACKGROUND TO THE COMPLAINT

1. The complainant, a lawyer representing an association (the 'Association'), made a complaint to the European Commission under Article 20(2) of Council Regulation 659/1999(1) concerning allegedly unlawful State aid which a Member State provided to a brewery. He used the Commission's complaint form to submit his complaint (the 'State Aid Complaint').

2. Attached to the State Aid Complaint was a power of attorney for the complainant (the 'Power of Attorney'), by which the Association empowered him to represent it in all legal acts relating to the submission of the State Aid Complaint, as well as "to accept all delivered documents".

3. By letter of 17 August 2007, to the President of the Association ('Letter 1'), the Commission (Directorate-General for Competition) informed the Association that it would not investigate the alleged State aid as regards beer. However, its Directorate-General for Agriculture and Rural Development would investigate the alleged State aid as regards malt. The Commission added that, if the Association did not dispute its finding within 20 working days, it would consider the State Aid Complaint as withdrawn with respect to beer. The Commission did not send the complainant the original of Letter 1, nor did it send him a copy of the said letter.

4. By letter of 27 August 2007, the complainant informed the Commission that he was the authorised legal representative of the Association, and requested it to provide him, in the future, with originals or copies of any communications it sends the Association relating to the State Aid Complaint.

5. By letter of 6 September 2007, the complainant submitted additional arguments to the Commission on why it should also investigate the alleged State aid with respect to beer.

6. In its e-mail of 19 September 2007, the Commission asked the complainant whether the statement included in the State Aid Complaint, to the effect that it was not confidential, also applied to the above additional information he had meanwhile provided.

7. Subsequently, on 8 April 2008, the Commission addressed a further letter to the Association ('Letter 2'), informing it that the aid in question does not involve unlawful State aid as regards beer, and explaining the reasoning behind this finding. The Commission added that, if the Association did not dispute this finding within 20 working days, it would consider the State Aid Complaint as withdrawn with respect to beer.

8. The Commission did not send Letter 2 to the complainant either.

THE SUBJECT-MATTER OF THE INQUIRY

9. In his complaint to the Ombudsman of 23 April 2008, the complainant alleged that the Commission failed to forward to him official communications concerning its handling of the State Aid Complaint he had submitted on behalf of the Association, acting as the latter's legal representative.

Therefore, he requested the Ombudsman to examine his complaint, make suitable recommendations for remedy and inform him of the outcome.

THE INQUIRY

10. On 1 September 2008, the Commission submitted an opinion on the Ombudsman's inquiry. The complainant sent his observations on 22 September 2008.

THE OMBUDSMAN'S ANALYSIS AND CONCLUSIONS

A. Alleged failure by the Commission to forward to the complainant official communications concerning its handling of the State Aid Complaint he had submitted on behalf of the Association

Arguments presented to the Ombudsman

11. The complainant alleged that the Commission failed to forward to him the official communications, which concerned its handling of the State Aid Complaint he had submitted on behalf of the Association, acting as the latter's legal representative. He pointed out that, along with his complaint, he had submitted the Power of Attorney which the Association had provided him with and according to which he was the Association's duly authorized legal representative. This entitled him, among other things, to accept all delivered documents concerning the State Aid Complaint. By granting the Power of Attorney to the complainant, the Association had expressed its desire for all documents relating to the handling of the State Aid Complaint to be delivered to him.

12. He also stressed the importance of Letters 1 and 2, which set deadlines for the Association to contest the Commission's findings concerning beer. In the complainant's view, by failing to send the above letters to him, the Commission had created a risk that the Association would not be able properly to react to them.

13. The Commission cited Article 20(2) of Council Regulation 659/1999(2), and referred to the internal procedures of its Directorate-General for Competition concerning the e xamination of State aid complaints. According to these procedures, the Member State's reply to the complaint may, with that Member State's prior agreement, be forwarded to the complainant for comments. If the complainant does not react within 20 working days, the complaint is considered withdrawn.

14. The Commission emphasised that the State Aid Complaint form the Association used clearly identified it as the complainant. That form did not contain any request to keep the Association's identity confidential or to address correspondence solely to the Association's lawyer.

15. In the Commission's view, it is normal practice to address correspondence relating to the substance of State aid complaints directly to the complainant identified in the relevant complaint form. By informing the Association directly, the Commission ensured that the State Aid Complaint was promptly dealt with and that the complainant was fully informed of its assessment of the case.

16. The Commission admitted that it had only addressed to the President of the Association the important Letters 1 and 2, which explained its assessment of the substance of the case. However, it had also always informed the complainant in the Ombudsman's inquiry by telephone of its treatment of the case.

The Ombudsman's assessment

17. The present case raises a procedural issue in relation to the handling of State aid complaints under Article 20(2) of Regulation 659/1999. When an interested party confers a Power of Attorney on a lawyer and submits it together with the State aid complaint, is the Commission required to send all related correspondence solely to the interested party, solely to its lawyer or to both?

18. At the outset, the Ombudsman would like to point out that the very purpose of a power of attorney is to provide evidence that a principal has authorised his/her lawyer to deal with third persons on his/her behalf.

19. Moreover, as rightly argued by the complainant, the submission of the power of attorney together with the State aid complaint constitutes per se the expression of the interested party's will/desire to be represented by a lawyer in a State aid procedure.

20. In the Ombudsman's view, the applicable legal rules and the internal procedures referred to by the Commission do not prevent it from taking account of this will by sending the substantive correspondence related to State aid complaints to the lawyer to whom the power of attorney is granted by the interested party. Ideally, if the power of attorney is submitted together with the State aid complaint, the Commission could send the relevant correspondence to both the interested party and its lawyer, unless the Power of Attorney foresees otherwise.

21. In the present case, the Commission sent the substantive correspondence solely to the interested party (the Association). The Commission appears to argue that it would have sent such substantive correspondence to the lawyer only if the Power of Attorney had contained (i) a request that the correspondence should be sent solely to the lawyer and/or (ii) if the complainant had requested confidentiality.

22. As regards argument (i), the Ombudsman points out that, in the Power of Attorney in question, there was also no request to send the correspondence solely to the Association. As regards argument (ii), and as the complainant rightly pointed out, if he had requested confidentiality, this would not have created an obligation for the Commission to send the correspondence to him.

23. In light of the above, the Ombudsman considers that the Commission has not reasonably explained why it did not send Letters 1 and 2 to the complainant. This failure to do so occurred in spite of the fact that the complainant had submitted the State Aid Complaint on behalf of the Association, and had annexed the Power of Attorney to it. Moreover, the Ombudsman fails to see why the Commission failed to send Letter 2 to the complainant, despite the fact that, in his letter of 27 August 2007 addressed to the Commission, the complainant repeated that he was the Association's legal representative, and specifically requested the Institution to send future communications concerning the State Aid Complaint also to him.

24. It follows from the above that it would have been good administration for the Commission to send copies of Letters 1 and 2 also to the complainant. The Commission's failure to do so constitutes maladministration.

25. Given that the President of the Association submitted Letters 1 and 2 to the complainant, who could subsequently take the relevant action on behalf of the Association within the State aid procedure in question, the Ombudsman does not consider that a friendly solution or a draft recommendation is justified in light of the above finding of maladministration. Therefore, he will make a critical remark below.

B. Conclusions

On the basis of his inquiries into this complaint, the Ombudsman makes the following critical remark:

In the present case, the complainant submitted the State Aid Complaint on behalf of the Association, together with the Power of Attorney by which the Association authorised him to represent it in all related legal acts, as well as "to accept all delivered documents".

However, the Commission sent its important letters of 17 August 2007 and 8 April 2008, containing its assessment of the substance of the State Aid Complaint, to the Association only. This was an instance of maladministration.

The complainant and the Commission will be informed of this decision.

 

P. Nikiforos DIAMANDOUROS

Done in Strasbourg on 20 November 2008

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(1) Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 [now Article 88] of the EC Treaty, OJ 1999 L 83, p. 1.

Article 20(2) of the Regulation reads as follows: "Any interested party may inform the Commission of any alleged unlawful aid and any alleged misuse of aid. Where the Commission considers that on the basis of the information in its possession there are insufficient grounds for taking a view on the case, it shall inform the interested party thereof. Where the Commission takes a decision on a case concerning the subject matter of the information supplied, it shall send a copy of that decision to the interested party."

(2) See footnote 1 above.